Email this article to a friend

Swiss wealth manager Julius Baer has reported a 10% fall in assets under management over the first half of the year but pre-tax profits only fell 3% in difficult markets conditions, as it announced the retirement of its group chief executive this morning.

Assets under management in the group fell to Sfr364bn (€224bn) from Sfr405bn over the first six months of the year.

The appreciation of the Swiss franc reduced the value of assets by Sfr19bn, while negative market performance cost Sfr32bn, the group said. The fall was partially offset by Sfr10bn of net new money from investors, of which private banking attracted Sfr8bn.

Despite the 10% fall in assets, the group's profits before taxes fell only 3% to Sfr653m compared with the same period last year.

Johannes de Gier, group chief executive, said: "Whilst the weak equity and debt markets as well as the strong Swiss franc have reduced our asset base, with an impact on our profits, Julius Baer has benefited from our pure play wealth management strategy, as evidenced by the significant net new money inflows the bank has achieved."

Assets under management in the private banking division were 5% lower at Sfr148bn, while assets under management in the investment products division fell by 5% to Sfr74bn. Meanwhile, client money looked after by the asset management division fell 17% to Sfr142bn.

At the end of June, London-headquartered funds of hedge funds business Gam had Sfr68bn of assets under management, and Artio Global—the US business that Julius Baer plans to list on the New York Stock Exchange when market conditions are more favorable—looked after Sfr74bn.

All the segments within the business enjoyed net inflows from investors except for Gam. The group said that "the highly challenging period for leveraged hedge fund style investments" led to net outflows from Gam. Its profit before taxes was down 3% to Sfr278m.

The group also announced that, following its restructuring last year to establish its subsidiaries as independent companies, it is scrapping the group chief executive role. De Gier will retire and become executive chairman of Gam on September 1.

The group said in today's statement that since November last year, Julius Baer Holding based in Zurich has operated as a pure financial holding company.